Full Transcript: Origin Bancorp Q2 2026 Earnings Call

Origin Bancorp (NYSE: OBK ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This content is powered APIs. For comprehensive financial data and transcripts, visit View the webcast at Summary Origin Bancorp Inc.

reported strong net income, return on average assets (ROA), and return on equity (ROE) for the second quarter, highlighting disciplined growth and strong credit performance. The company continues to execute its 'Optimized Origin' strategy, focusing on strategic investments, capital allocation, and talent acquisition, with significant growth in Texas and Southeast markets. Noninterest-bearing deposits increased by nearly $200 million, reflecting a 26% share of total deposits, and new account openings surged 82% year over year. 02% annualized for the quarter.

92%, driven by improved loan yields and slightly lower deposit costs. The company repurchased 217,034 shares and increased its share repurchase authorization by $100 million, maintaining strong capital positions. Management expressed confidence in ongoing opportunities due to market disruptions and aims to continue disciplined execution, strategic investments, and maintaining a strong culture. Full Transcript OPERATOR Ladies and gentlemen, good morning and welcome to the Origin Bancorp Inc.

second quarter earnings conference call. My name is Tom and I'll be your Evercall coordinator. The format of the call includes prepared remarks from the company followed by a question-and-answer session. All attendees will be on a listen-only mode until the Q&A portion of the call.

Please note this event is being recorded. I would now like to turn the conference call over to Chris Reigelman, Director of Investor Relations. Please go ahead. Chris Reigelman, EVP, Director of Investor Relations and Corporate Sustainability Good morning and thank you for joining us today.

We issued our earnings press release yesterday afternoon, a copy of which is available on our website along with a slide presentation we will refer to during today's call. Please refer to page two of our slide presentation which includes our safe harbor statements regarding forward-looking statements and the use of non-GAAP financial measures. com. Please also note that our safe harbor statements are available on page seven of our earnings release filed with the SEC yesterday.

All comments made during today's call are subject to our safe harbor statements in our slide presentation and earnings release. I'm joined this morning by Origin Bancorp's Chairman, President and CEO Drake Mills, President and CEO of Origin Bank, Lance Hall, our Chief Financial Officer Wally Wallace, Chief Risk Officer Jim Crotwell, our Chief Accounting Officer Steve Brawley and our Chief Credit and Banking Officer Preston Moore. After the presentation, we'll be happy to address any questions you may have. Drake, the call is yours.

Drake Mills, Chairman, President and CEO Thanks, Chris, and thanks for being with us this morning. This quarter marks another important step in the work we started about 18 months ago with Optimized Origin. We have remained disciplined in executing a strategy centered on delivering elite financial performance while strengthening the culture that has always differentiated Origin. Today we are seeing the benefits of that work across our company.

We reported strong net income, ROA and ROE results in the second quarter. We achieved these results while maintaining disciplined growth, strong credit performance and continued investment in our people and our franchise. We believe the best long-term results come from balancing strong profitability with disciplined execution. What encourages me most is the consistency of our performance.

Optimized Origin has become the way we operate. It influences how we allocate capital, how we invest in technology, how we recruit talent and how we serve clients, and ultimately how we create value for our shareholders. The opportunities we discussed over the last several quarters continue to grow. The disruption we're seeing across our markets continues to create opportunities.

Talented bankers and quality clients are looking for stability and a strong culture and a long-term partner. Our teams continue to capitalize on this disruption. We are well positioned to grow relationships without compromising credit standards and the client selection process that have helped define Origin's success. As we move through the remainder of 2026, our objectives remain clear.

We will continue to execute on Optimized Origin, invest strategically across our footprint, attract exceptional talent and appropriately deploy excess capital. These priorities position us well to achieve our near-term financial targets while continuing our pursuit of becoming a top-quartile performer. Now I'll turn it over to Lance and team. Lance Hall, President & CEO, Origin Bank Thanks, Drake, and good morning.

Over the past 18 months, Optimized Origin has transformed the way we operate. We are becoming a more disciplined, more intelligent and more scalable organization. Optimized Origin represents the intersection of focused execution, strategic investment and the ability to capitalize on market disruption that positions Origin for long-term value creation. The results we're reporting this quarter highlight the generational market disruption opportunity in our footprint on both the banker and client acquisition fronts.

Since April 1, we added 12 experienced bankers as part of our targeted and disciplined lift-out strategy that follows the 15 bankers we added during the first quarter. In the second quarter we expanded into Birmingham, Alabama with a well-known team of local, experienced bankers. We also added production talent in North Texas, Houston, East Texas and Mississippi. These additions reinforce our belief that Origin is increasingly becoming an institution of choice for talented bankers and quality clients who believe that trust is earned, not acquired.

Great bankers attract great clients and we are seeing that play out across our markets. I'm equally encouraged by the balance and discipline of our growth. Year to date, C&I and owner-occupied commercial real estate grew $196 million, other commercial real estate categories grew $167 million and mortgage warehouse grew $61 million. This healthy growth is based on full relationships with disciplined pricing and attractive long-term results.

Our strategic investments in growth markets continue to validate our vision. Through the first half of the year, our Texas and Southeast markets generated $323 million of loan growth including roughly $250 million from Texas alone on approximately $860 million of new loan production. The market disruption opportunity is real. We are taking advantage of this opportunity during this period with new bankers, new clients, new production and strong pipelines across the company.

Our objective clearly is not just to grow asset size through data and models. Our focus is on relationship profitability, pricing, core deposit generation and long-term returns. That discipline on both the asset and funding side of the balance sheet is becoming an important differentiator for Origin. On the deposit side, I'm very encouraged by how we're executing.

Noninterest-bearing deposits increased nearly $200 million during the quarter and are now 26% of total deposits. That is a meaningful outcome, but more importantly, it's evidence that our bankers are winning primary banking relationships. This is supported as I look more deeply into our deposit account opening data. Account openings accelerated meaningfully during the first half of the year, up more than 36% year over year.

The pace continued to build throughout the second quarter. June was a historically strong month for deposit account openings, with new account openings up 82% year over year. To me, this growth is one of the clearest indicators that our relationship strategy is gaining traction. Deposit account growth is not just a funding metric, it's a client acquisition metric.

It tells us that the businesses and families across our markets are choosing Origin as their primary banking partner. While we continue investing in talented bankers, we're also making meaningful investments in technology, artificial intelligence and data to enhance our operating model. These investments are designed to give our bankers better information, faster insights and simpler processes so they can spend time doing what differentiates Origin: building deep relationships with clients. We believe these investments will improve productivity, enhance decision-making, and allow us to scale the franchise more efficiently.

Finally, I want to spend a moment on culture because I believe it is directly connected to the financial results we are producing. As highlighted on slide seven of our presentation, our most recent GLMP survey produced the highest scores in our company's history across culture, engagement, employee satisfaction, and willingness to recommend. These results are among the top 10% globally across all industries and reflect years of intentional investment in our people, our leadership and our values. As our industry continues to evolve, I believe that Origin's culture remains one of our most meaningful competitive advantages.

I am so optimistic about the momentum we are building and the opportunities ahead for Origin. With that, I'll turn it over to Jim. Jim Crotwell, Chief Risk Officer Thanks, Lance. We experienced sound and improving credit metrics during the second quarter of 2026.

6%, reflecting the lowest level over the past five quarters. Net charge-offs for the quarter were only $454,000, benefiting from recoveries totaling $2 million. 08% year to date. 98% of loans, representing the lowest level over the past five quarters.

2 million, driven primarily by the downgrade of four relationships more than offset by balance reduction in seven relationships. 2 million. 30% of total loans net of mortgage warehouse. 6 million release driven by the reduction in historical loss factors within the CECL model.

As to total ADC and CRE, and as we have shared on previous calls, we continue to have ample capacity to meet the needs of our clients and grow this segment of our portfolio, reflecting funding to total risk-based capital of 51% for ADC and 237% for CRE. We continue to be pleased with the sound credit performance of our portfolio. I'll now turn it over to Wally. Wally Wallace, CFO Thanks, Jim, and good morning, everyone.

09, representing our strongest quarterly earnings performance since Q4 of 2021. 15% near-term run-rate objective and another meaningful step toward our long-term goal of becoming a top-quartile performer. 73%. As you can see on slide 26, notable items were negligible during the quarter, resulting in no impact to EPS.

9% when excluding mortgage warehouse. 6% during the quarter, consistent with seasonal trends. 2% on an average basis, ending the quarter at 26% of total deposits, or 25% on an average basis. Moving forward, we continue to target loan and deposit growth in the mid- to high-single digits for the year, though we are still tracking towards the higher end of the range.

92%, substantially exceeding our expectations entering the quarter. 2 million despite a 1% decline in average earning assets. Margin expansion was driven by a combination of improved loan yields, slightly lower cost of deposits, and runoff of excess liquidity due to normal seasonality in our deposit portfolio during the quarter. Moving forward, we've removed any Fed rate actions from our forecast for the remainder of the year, and we expect margin will remain relatively flat.

Combined with our balance sheet growth expectations, we now anticipate net interest income growth in the high single digits for both the full year and Q4 over Q4. 4 million in Q2 excluding notable items. 4 million in Q1 primarily due to normal seasonality. In our insurance business, we continue to track toward the lower end of our prior noninterest income outlook, resulting in an adjusted outlook for full-year noninterest income growth in the low to mid-single digits, with Q4 over Q4 growth in the low single digits.

0 million in Q1. 8 million in Q1. Consistent with our expectations, our expense growth outlook remains mid-single-digit growth for both the full year and on a Q4 over Q4 basis after excluding notable items. 72%, though we are tracking ahead of these targets.

1%. 60 while maintaining all regulatory capital ratios above well-capitalized levels. 6 million in remaining authorization. During the quarter, we also continued returning capital through our recently increased quarterly dividend.

We believe our balance sheet, earnings profile, and capital position provide us with significant flexibility as we continue investing in growth while also returning capital to shareholders as appropriate. With that, I'll turn it back to Drake. Drake Mills, Chairman, President and CEO Thanks, Wally. Over the past several quarters we've talked extensively about Optymyze, Origin, and the transformation across our company.

Today we're seeing what that transformation looks like when it's more fully reflected in our financial performance. This quarter wasn't simply about reporting strong earnings. It was about demonstrating that we can consistently produce higher levels of profitability while remaining disciplined in how we grow, how we manage risk, and how we invest in our people and our communities. I'm extremely confident in Origin's future.

Our markets present outstanding long-term opportunities. We are attracting talented bankers and high-quality clients. Our investment in technology and innovations are improving on how we serve our customers and how we operate as an organization. And perhaps most importantly, we are executing in a high level of discipline.

When I step back and look at Origin today, compared to 18 months ago, I see a fundamentally different company. Through optimized Origin, we become more disciplined in our execution, more intentional in our investments, more data driven in our decisions, and more focused on long-term value. The results we're discussing today aren't the destination. It's evidence that the transformation is working.

Thanks for being on the call. We'll open up for questions. OPERATOR Thank you again, team. Ladies and gentlemen, at this time we will conduct the question-and-answer session.

If you'd like to ask a question, please press star-one on your telephone keypad to enter the queue. Or if you've joined via web, please press the raise hand icon on the right side of your screen. Again, that'll be star-one on your telephone keypad or the raise hand icon on the right side of your screen. We will pause here briefly to allow any questions to generate.

Our first question comes from Matt Stevens. Matt, your line is open. You may proceed. Matt Stevens, Analyst Hey, thanks.

Good morning. Appreciate you taking my questions. Start on the loan growth front. Another quarter of solid loan growth.

Based on Lance's comments, a lot of that growth was in Texas and also in the Southeast markets. Just any more color you can share about the loan growth, the loan pipeline from here, and specifically what you're seeing around loan pricing. I think Wally mentioned in the second quarter that the loan yields improved. Anything to call out there?

Lance Hall, President & CEO, Origin Bank Yeah.